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LUNCH SEMINAR 2012-2013

 
Program June 2013

June 3rd, 2013
12:15-13:15
Location: Ground Floor Library, Department of Economics, Building 081
 

Francisco RUIZ-ALISEDA (Ecole Polytechnique, Department of Economics)
"Dynamic Competition for Private Information"

Contact: Arnaud Goussebaile

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June 10th, 2013
12:15-13:15
Location: Ground Floor Library, Department of Economics, Building 081
 

Antoine LEBLOIS (Ecole Polytechnique, Department of Economics)
"Price vs. weather shock hedging for cash crops: ex ante evaluation for cotton producers in Cameroon"
 
Abstract: In the Sudano-sahelian zone, which includes Northern Cameroon, the interannual variability of the rainy season is high and irrigation is scarce. As a consequence, bad rainy seasons have a detrimental impact on crop yield. In this paper, we assess the risk mitigation capacity of weather index-based insurance for cotton farmers. We compare the ability of various indices, mainly based on daily rainfall, to increase the expected utility of a representative risk-averse farmer. We first give a tractable definition of basis risk and use it to show that weather index-based insurance is associated with a large basis risk, whatever the index considered. It has thus limited potential for income smoothing, a conclusion which is robust to the utility function. Second, in accordance with the existing agronomical literature we find that the length of the cotton growing cycle, in days, is the best performing index considered. Third, we show that using observed cotton sowing dates to define the length of the growing cycle significantly decreases the basis risk, compared to using simulated sowing dates. Finally we find that the gain of the weather-index based insurance is lower than that of hedging against cotton price fluctuations which is provided by the national cotton company. This casts doubts on the strategy of supporting weather-index insurances in liberalised cash crop sectors without recommending any price stabilisation scheme.

Contact: Arnaud Goussebaile

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June 17th, 2013
12:15-14:00
Location: Ground Floor Library, Department of Economics, Building 081

Meeting of resident members
 

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Archives
Program May 2013

May 21st, 2013
10:30-13:00
Location: Ground Floor Library, Department of Economics, Building 081

Meeting of resident members

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May 27th, 2013
12:15-13:15
Location: Ground Floor Library, Department of Economics, Building 081
 

Abstract: This paper examines observational learning in voting behaviour through the mid-election release of exit poll forecasts. I exploit the unique set-up of the Indian General Election where the order of polling differs across constituencies, even within a given state, to identify the effect of media forecasts on voting decisions. I model the evolution of voter preferences as a Bayesian updating process in which voters have imperfect information and are uncertain about party quality. Using a semi-parametric regression discontinuity approach, I compare voting behaviour amongst early and late voters located on either side of the within-state boundary that demarcate polling phases. I find that late voters react to surprises in voting returns and increase, by 20%, their probability of voting for parties that made early-poll gains.
 
Program April 2013 
April 8th, 2013
12:15-13:15
Location: Ground Floor Library, Department of Economics, Building 081
 
Alfred GALICHON (Sciences Po)
"Personality Traits and the Marriage Market"
 Joint work with Arnaud Dupuy
 
Abstract: Which and how many attributes are relevant for the sorting of agents in a matching market? This paper addresses these questions by constructing indices of mutual attractiveness that aggregate information about agents' attributes. The first k indices for agents on each side of the market provide the best approximation of the matching surplus by a k-dimensional model. The methodology is applied on a unique Dutch households survey containing information about education, height, BMI, health, attitude towards risk and personality traits of spouses. Three important empirical conclusions are drawn. First, sorting in the marriage market is not unidimensional: individuals face important trade-offs between the attributes of their spouses which are not amenable to a single dimensional index. Second, although education explains a quarter of a couple's observable surplus, personality traits explain another 20%. Third, different personality traits matter differently for men and for women.
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April 15th, 2013
12:15-13:15
Location: Ground Floor Library, Department of Economics, Building 081
 
Ronan LE SAOUT (Department of Economics, Ecole Polytechnique and Crest))
"Internships, major choices and labor market outcomes of French “Grandes Ecoles” graduates"
Joint work with E. Coudin (Crest)
 
Abstract: In this paper, we study the role of internships in students orientation and career beginning. On-the-job experiences accumulated during schooling and before specialization, via internships, give to students some information they may exploit to choose their majors, and to employers some insights on the skills of potential future co-workers. Internships may then improve the students’ orientations, signal students’ abilities to employers and consequently affect initial wages, but at the cost - for students - of entering the labor market one year later. In recent years, more and more French “Grandes Ecoles” students made the choice to undertake an optional full year of internships between the two years of their Master degree. We analyze the effect of this decision on subsequent major choice and labor market outcomes: wages after graduation, satisfaction at work, ... Our data come from an original survey about the integration of graduates from a French “Grande Ecole” matched with students’ attainments obtained during the schooling program. This enables us to account for student abilities. First empirical results indicate that the wage return of a full year of internships equals two thirds of the return of one year of work experience, the effect on satisfaction is positive, and no clear link with the major choice is found. However, these reduced-form results do not fully account for the fact that the optional year of internships is a decision variable. Hence, the next step is to develop and estimate a structural model of schooling decision, which includes the full year of internships choice as a step before the major one.
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April 22nd, 2013
12:15-13:15
Location: Ground Floor Library, Department of Economics, Building 081
 
Pierre PICARD (Department of Economics, Ecole Polytechnique)
"Automobile insurance fraud in Taiwan : On the collusion between policyholders and car dealers and the manipulation of claims"
 Joint work with Kili C. Wang (Department of Insurance, Tamkang University, Taiwan)
 
 
Abstract: The prevalence of fraud in insurance markets is affected by the credibility of the insurer’s monitoring effort. The commitment of insurers to audit claims is limited by several factors, such as the cost of proving that a claim has been falsified and the bargaining power of defrauders, including service providers in the case of collusion. In this paper, we analyze the car insurance fraud mechanims in Taiwan that go through the policyholder-car dealer coalition. We develop a theoretical and empirical analysis that explains how the coalition formed by the DOAs (dealer-owned agents) and their customers tends to weaken the insurer’s audit commitment, and how it can draw benefit from manipulating the date and the amount of insurance claims. An opportunistic insured has the incentive to manipulate the claim date to reduce the burden of deductible and to manipulate the bonus-malus mechanism. The professional advantage enjoyed by the DOA in terms of being able to repair a damaged vehicle and its strong bargaining power reduces the insurer’s credibility in its claims monitoring activity. We use a large database from the largest Taiwanese insurance company and we show that the fraud rate is larger among policyholders who purchase insurance through the DOA channel than among other policyholders. We also establish that fraud goes through the postponing of claims to the end of the policy year, possibly by filing one unique claim for several events.
Contact: Arnaud Goussebaile
 
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Program March 2013

 

March 18th, 2013
 
Eduardo PEREZ (Department of Economics, Ecole Polytechnique)
"Evidence Proof Mechanisms"
Joint work with Jeanne Hagenbach et Frederic Koessler
 
 
Abstract: We study Bayesian implementation when the agents can produce evidence about their types. We consider a particular class of mechanisms in which the mechanism designer cannot ignore the evidence. We use these mechanisms to derive sufficient conditions for weak and full implementation in Bayesian as well as ex post equilibria.
 
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March 25th, 2013
No Lunch Seminar
12:15-14:00 
Location: Ground Floor Library, Department of Economics, Building 081

Meeting of resident members 
Annulé 

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Program February 2013

February 11st, 2013
No Lunch Seminar
12:15-14:00 
Location: Ground Floor Library, Department of Economics, Building 081

Meeting of resident members

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February 18th, 2013
 
Mathias ANDRE (Department of Economics, Ecole Polytechnique)
"Investing in Human Capital : Impact of Specialization for New Comers in the Labor Market"
Joint work with Maxime TO (CREST and Sciences Po)
 
Abstract: This paper studies and quantifies the returns to specialization defined as the schooling choice of a specific field of study. As a consequence we consider two different dimensions of education: a quantitative one, the number of accumulated years of schooling, and a qualitative one, the field of study. This distinction reveals a tradeoff between productivity and adaptability in the Human Capital accumulation process : while specific human capital may be rewarded by high returns in a few specific tasks, general human capital may give workers more job opportunities. To understand the impact of schooling decisions in this framework, we build a dynamic discrete choice model allowing for heterogeneity in returns to human capital: individual are supposed to be forward looking agents making sequential schooling decisions and then facing a labor market specific to her field. To estimate the model, we use French panel data Génération 98, with more than 6500 men over 7 years. All these individuals exit school in 1998 and are interviewed until 2005. The data provide very detailed individual on both schooling and working trajectories. The estimates of the model allow to build counterfactual analysis and to assess the impact of changes in terms of local supply of schooling. It also allows to show the consequences of an unexpected shock on a specific labor market.
Contact: Arnaud Goussebaile
 
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February 25th, 2013
 
Julien PRAT (Institut of Economic Analysis IAE-CSIC, Barcelona)
"Firm Heterogeneity, Directed Search and Wage Dispersion in the Global Economy"
 
 
Abstract: Increasing within-group inequality plays an important role in explaining overall inequality trends in industrialized countries. We investigate the role of international trade for this pattern. To this end, we incorporate directed labor market search into a model of international trade with heterogeneous firms and homogeneous workers. First, we offer a tractable static general equilibrium model that generates a non-degenerate distribution of wages mirroring that of firms' productivities. Trade liberalization increases real wages of all employed workers. However, by changing the allocation of workers across firms, it may result in higher inequality and unemployment. Second, we generalize the model to the dynamic case, where wage inequality across and within firms results from different firm-level growth rates. We calibrate the model to German linked employer-employee data in order to capture several key features of firm dynamics.
 
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 Program Janvier 2013

January 21st, 2013
12:15-13:15
Location: Ground Floor Library, Department of Economics, Building 081
 

Bernard SINCLAIR-DESGAGNE (HEC Montréal, CIRANO and CIRPÉE)
"The Prudent Principal"
Joint work with Sandrine Spaeter (BETA, CNRS and University of Strasbourg)

 

Abstract: This paper re-examines executive incentive compensation, using a principal-agent model in which the principal is downside risk averse, or prudent (as a number of empirical facts and scholarly works suggest it should be), instead of risk neutral (as it has been commonly assumed so far in the literature). We find that optimal incentive pay should then be ‘approximately concave’ in performance, the approximation being closer the more prudent the principal is relative to the agent. This means that an executive should face higher-powered incentives while in the bad states, but be given somewhat weaker incentives when things are going well. Such a statement runs counter to current evidence that incentive compensation packages are often convex in performance. We show that this disparity can be justified under certain limited liability and taxation regimes. Implications for public policy and financial regulation are briefly discussed.

Contact: Arnaud Goussebaile

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January 28th, 2013
12:15-13:15
Location: Ground Floor Library, Department of Economics, Building 081
 

Raicho BOJILOV (Department of Economics)
"Who creates New Firms?"

 

Abstract: Start-ups are one of the main avenues for the introduction of new products, services, technologies and techniques. In this paper, we attempt to give a profile of the people who create start-ups across countries. We also investigate what are the environmental factors that influence the decision to found a company: potential market size, financial credit, regulation, taxes, rule of law, etc. In departure from the existing literature, we also study how elements of the prevailing economic culture affect the decision to create a firm. Conditional on creating a new firm, we explore what are the determinants of its success through two measures: size of the firm and income of the creator. We use individual-level data from the World Values Surveys from the late 1990s to the mid 2000s to address these issues. To the knowledge of the authors, this is the first study of these issues based-on individual level data from a large set of countries.

Contact: Arnaud Goussebaile

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Archives 2012
 
Program December 

December 3rd, 2012
12:15-13:15
Location: Ground Floor Library, Department of Economics, Building 081

Esther DELBOURG   (Departement d'Economie)                 
"Cooperation and conflict up and down African rivers"
Joint work with  Eric Strobl

Abstract: This study aims at understanding transboundary water management in Africa between 1949 and 2006, by analyzing both what drives bilateral interaction and second what determines its outcome, whether cooperative or conflictive, using the Basins at Risk database by Wolf et al (2003). Our main contribution to the literature is twofold: first, we look at relative water scarcity within transboundary river basins, namely streamflow. Second, we concentrate our study on upstream-downstream country pairs, as computed through the extensive use of GI systems. Our results show that over the last 50 years, interaction has been more likely to take place when there was little or no asymmetry in relative upstream-downstream streamflows. Regarding its outcome, interaction has been cooperative when both countries enjoyed recent increase in their runoff, while conflictive interaction took place when recent values of streamflow had, on average, decreased.  

Contact: Arnaud Goussebaile

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December 10th,2012
No Lunch Seminar
12:15 - 14:00
Location: Ground Floor Library, Department of Economics, Building 081

Meeting of resident members

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December 17th, 2012
12:15-13h15
Location: Ground Floor Library, Department of Economics, Building 081

Thomas LE BARBANCHON (CREST)
The Effect of the Potential Duration of Unemployment Benefits on Unemployment Exists to work and Match Quality in France"

Abstract: Recent empirical literature very limited average effects of generous unemployment benefits on match quality. This study examines those effects in a setting where they could be large. We focus on workers with low employability and evaluate the impact of a very large increase in potential benefit duration form 7 to 15 months. Yet our regression discontinuity design does not elicit significant short-term or medium-term effects on either employment duration or wages. This contrasts with the usual finding of a large negative effect of generous unemployment benefits on unemployment exists to work.

Contact: Arnaud Goussebaile

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Program November 

November 12nd, 2012
12:15-13h15
Location: Ground Floor Library, Department of Economics, Building 081 

Marie-Laure ALLAIN (Département d'Economie)
"the impact of retail mergers on food prices: evidence from France" 
co écrit avec C. Chambolle, S. Turolla et S. Berto Villas Boas. 

Abstract: Using consumer panel data, we analyse the impact of a merger in the retail sector on food prices in France. In order to capture the local dimension of retail competition, we define local markets as catchment areas around each store.  We develop a difference-indifferences analysis to compare price changes in local markets where the merger did modify the ownership structure (treated group) to price changes in local markets where the merger did not affect the ownership structure (control group). We find that the merger had no significant effect on the prices of the merging firms, but significantly raised the competitors' prices. We interpret these results as the combination of efficiency gains for the merging firms and possible coordinated effects or a decrease in differentiation.

Contact: Arnaud Goussebaile

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November 19th, 2012
No Lunch Seminar

3rd PhD - Student Day - click here -

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November 26th, 2012
12:15-13h15
Location: Ground Floor Library, Department of Economics, Building 081

Frédéric LOSS (CNAM - LIRSA, Laboratoire d’Econométrie)
"Communication and Binary Decisions: Is it better to communicate?"
Joint work with Estelle Malavolti and Thibaud Vergé

Abstract: We study information transmission between an informed expert and an uninformed decision-maker when the decision is binary and the expert does not have a systematic bias. Whenever, an equilibrium exists where the decision is delegated to the expert, it is ex-ante Pareto-dominant. Adding a round of multilateral communication does not improve information transmission. The decision-maker can however improve information transmission by communicating sequentially with two experts. However, introduce multiple rounds of communication (i.e., allowing for rebuttal) does not help.

Contact: Arnaud Goussebaile

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Program October 

October 1st, 2012
12:15-13h15
Location: Ground Floor Library, Department of Economics, Building 081 

Edouard CHALLE (Département d'Economie)
"Precautionary saving and aggregate demand fluctuations"
 Joint work with Julien Matheron and Xavier Ragot

Abstract:This paper introduces incomplete insurance against idioyncratic labour income risk into an otherwise standard New Keynesian business cycle model with involuntary un-employment. Following an adverse aggregate (policy or productivity) shock that lowers aggregate demand, job creation is discouraged and unemployment risk (as summarised by the job-loss rate) persistently rises. Imperfectly insured households rationally respond to the rise in indosyncratic income uncertainty by increasing precautionary saving, thereby cutting consumption and depleting aggregate demand even further; this in turn magnifies the initial labour market contraction, further raises unemployment risk, and so on. A calibrated version of the model suggests that the aggregate demand/unemployment risk/precautionary saving feedback loop may double the impact of aggregate shocks on employment, relative to the full-insurance case.

Contact: Arnaud Goussebaile 

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October 8th, 2012
12:15-13h15
Location: Ground Floor Library, Department of Economics, Building 081

Etienne LEHMANN  (ERMES - Université Panthéon Assas & CREST)
"Optimal Income Taxation between Competing Governments"

Joint work with Laurent Simula (University of Uppsala, Sweden) et Alain Trannoy (Aix Marseilles School of Economics)

Abstract: We investigate how the optimal nonlinear income tax schedule is modified when taxpayers can evade taxation by emigrating. We consider two symmetric countries with Maximin governments. Workers choose their labor supply along the intensive margin. The skill distribution is continuous, and, for each skill level, the distribution of migration cost is also continuous. We show that optimal marginal tax rates are nonnegative at the symmetric Nash equilibrium when the semi-elasticity of migration is decreasing in the skill level. When the semi-elasticity of migration is increasing in the skill level, either optimal marginal tax rates are positive everywhere or they are positive for the lower part of the skill distribution and then negative. Numerical simulations are calibrated using plausible values of the semi-elasticity of migration for top income earners. We show that the shape of optimal tax schedule varies significantly, depending on the profile of the semi-elasticity of migration over the entire skill distribution – a profile over which we lack empirical evidence.

Contact: Arnaud Goussebaile

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October 15th, 2012
12:15-13h15
Location: Ground Floor Library, Department of Economics, Building 081 

Raicho BOJILOV  (Département d'Economie)
“Incentives to Work or Incentives to Quit?”

Abstract: Pay incentives affect not only effort choice but also turnover and thereby the quality mix of the workforce. This paper investigates how considerations about the quality mix shape pay policy and profits within a structural model of effort choice, symmetric learning about match quality, and turnover. Using unique data from a call centre in North Carolina, I estimate the model in two steps adapting estimation methods for dynamic structural models to the analysis of employment dynamics. Then, I consider three classes of contracts: (1) compensation depends only on current output; (2) compensation depends also on past output; (3) compensation depends on all available information and may vary with tenure. The results indicate that experimentation to improve the quality mix is a primary concern that affects the optimal contracts in the three classes. Experimentation requires high turnover which is also associated with the destruction of accumulated specific human capital. The trade-off between experimentation and the accumulation of specific capital determines the characteristics of the optimal contracts. 
  

Contact: Arnaud Goussebaile

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